Farewell to Treasury

A short speech that I gave at my farewell party when I left
my job at the U.S. Treasury Department, where I had been Deputy
Assistant Secretary for Economic Policy.

Thank you. I do not think that I will hear so many people say
so many complimentary things again until after I am dead.

I want to offer three toasts.

The first toast I want to offer is to the bureaucracy of OASIA
[the Office of the Assistant Secretary for International Affairs].
You see, I was never supposed to work for Treasury Economic Policy.
After Clinton won the presidential election and Larry Summers
was chosen to be Under Secretary of the Treasury for International
Affairs, I told Larry that I would like to come down from Boston
to Washington and work for him if he could find a space where
I would be useful.

He said that that would be wonderful. And he would get to work
on it right away.

Then there was silence.

A month or so later I gave Larry a call: "What's happening?"
I asked.

"It's bureaucratic," he replied. "I'm not confirmed.
I can't move people around until I'm confirmed."

"How many people do you have working for you?" I asked.

"About 250," he replied. "But I can't do anything
for another month or two."

So one morning, after a conference that Larry Summers and I had
both attended, he said: "Come with me to the Treasury right
now. I want Alicia Munnell to interview you for a slot as her
deputy. It's a better job than any I'll be able to find for you."

So I did. And Alicia has certainly been the best of all possible
bosses over the past more than two years--Treasury Economic Policy
has been the best of all possible places to work. But I would
never even have thought about applying had the bureaucracy of
OASIA not managed to stymie any rapid move from Boston down to
Treasury International Affairs.

So my first toast is to the bureaucracy of OASIA: may it always
have positive unintended consequences.

For my second toast, I remember that before I came to Washington
I had a brief talk with Mike Boskin. "Brad," he said.
"You'll have a choice: you can either be an analyst or a
salesman."

"What do you mean?" I asked.

"You will be most effective if you realize that your principal
job is taking the work that the career staff have produced, and
bringing it to the attention of the political appointees. And,
on the other hand, going back to the career economists and telling
them what lines of substantive work are likely to have an impact
on the political appointees. There are lots and lots of good analytic
economists working for the government. But too much of the time
their work has little impact--because low-level political appointees
like Deputy Assistant Secretaries think that they are analysts
rather than salesmen, think that they are supposed to do the analytical
work themselves, rather than acting as channels by which the work
of the career staff can be taken to where it will be useful."

So I took his advice to heart. I hope I have been a good salesman
for the substantive work produced by the Treasury's career economists.
But I have found that the Treasury's professional staff is a truly
excellent group--and that the time I have spent trying to ferry
their work up the bureaucracy to the High Politicians has been
very well spent.

So my second toast is to the--excellent--career staff of the U.S.
Treasury Department: a much higher quality staff than the country
or the High Politicians have any right to expect.

For my third toast, think back fifty years. Think of Deputy Treasury
Secretary Harry Dexter White, and of John Maynard Keynes, his
partner in the round of organizing conferences and decisions that
set in place the framework for the international economy that
set in motion the best decades the world economy has ever seen.
I think of a toast that Keynes offered, I believe in Charleston
SC, in the company of a group of Treasury officials and others
almost exactly fifty years ago.

Keynes saw economics as a service profession--"rather like
dentists," was the phrase he used in his essay on "Economic
Possibilities for Our Grandchildren". If there is something
wrong with your teeth, you go to a dentist, and he or she fixes
things. If there is something wrong with your economy, you go
to an economist, and he or she...

Well, the analogy does break down...

He or she at least explains why things are unlikely to get better
and why steps to try to make them better will probably make them
worse. Our specialty is telling unpleasant truths to powerful
people who do not want to hear them. This is not called the Dismal
Science for nothing.

But in Keynes's view economics, rather like dentistry, was not
especially desirable or worthwhile or beautiful or good in itself.
It was not Civilization. Civilization--the things that were
worthwhile--were things like the novels of his friend Virginia
Woolf, the paintings of his friend Duncan Grant, the dances of
his wife the ballerina Lydia Lopokova. The things that were the
good and the beautiful--Civilization--were the insights of artists,
the achievements of artisans, and the pleasures of culture.

But economics was part of the underpinnings: political democracy
and cultural advance do depend strongly on economic prosperity.
Without economic prosperity, the truly good and beautiful things
are not even possible.

And economists have a good deal of good advice to give as to how
to attain economic prosperity.

So let me echo John Maynard Keynes and offer a toast, a toast
to our company: "To the economists. They are the guardians,
not of Civilization, but of the possibility of Civilization."